Time to rethink your retirement plans

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What is the definition of retirement?

There are many definitions. However, the best that I have came across till date is – “Retirement is a time when you don’t work for money. It’s the time when money should start working for you.”

Paving the way for better retirement returns

You might have read many articles by financial planners on retirement planning, most of which suggest that you should start planning for your retirement when you are working, you should save and invest some specific amount of money every month to accumulate a corpus from which you can withdraw money every month after retirement. And these suggestions are true.

Time to wake up to retirement planning

Financial independence is important when you are planning for retirement. But, you should also plan for the free time that you will get. Many people have no idea what life’s going to be like once they retire. It can be the most rewarding experience or the most disastrous one. You need to think about the financial side of retirement, but mental and emotional changes can be far more devastating than monetary issues.

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Let’s take the example of the film Baghbaan, where the protagonist retires from his job in a bank. Initial days are very pleasant, but as the film progresses, he finds it difficult to cope with his free time. Later he has to part from his wife.

The film emphasises on the need for financial independence, especially the kind of social fabric we live in.

However, you might remember that the protagonist starts to live life when he starts to write his book. Now, this is very important. When he starts writing he spends less time at his son’s house and feels engaged.

Try to imagine that you don’t have to get up in the morning to catch that 7.36 slow-local from Borivali to Churchgate. You eat, sleep, watch TV, go for walk with your dog or do nothing at all. It sounds great. Some people can enjoy this lifestyle indefinitely, but most get bored soon. When you retire, this would be your lifestyle, unless you make other plans. The rest of your life could be 30-35 years; can you do nothing for that long?

Retirement planning is much more than opening a PPF account or purchasing a pension plan from any life insurer or mutual funds house.

While these are excellent beginnings, you should also plan for all events that can and would happen after you choose to retire.

Planning for your retirement income is definitely very important; however, you need to take into consideration the following aspects -

You must plan what will you do to keep yourself occupied after you retire:

When you start thinking about retiring, also start thinking about what you plan to do once you retire. Are you going to pursue a hobby, travel, join an ashram, volunteer or work? Just sitting around waiting to die shouldn’t be an option. Retirement will give you lots of free time. So you need to prepare mentally and emotionally to handle this time.

You need to decide where you will live after retirement:

People staying in their own house and people staying in company provided accommodation should figure out where to stay after retirement. Would you like to stay with friends, or go back to your native place to stay with your family? This decision will help you to figure out how much you will have to add to the kitty in case you need to buy a house.

You must also plan for the disposition of your assets upon your death:

This calls for a comprehensive estate planning with all your wills, powers of attorney, trust etc., being properly drafted and registered.

You should also have your daily diet and workout plan ready:

This very important in today’s era when medical costs are touching new heights and also health insurance is getting costlier with a number of exclusions increasing as age goes up.

Dealing with tax matters.

Insurance you will need and how you will pay for it.

Would your loans remain unpaid after retirement? If yes, then how much and how will you service it?

Retirement used to mean sitting on an easy-chair, reading the newspaper in your garden and waiting for life to end. Nowadays, retired people are starting their second and third careers, travelling non-stop and enjoying good health.

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Your retirement plan needs to include lifestyle plans as well as financial plans. Retirement is like the second innings – where scoring runs is important, but more important is to stay fresh.

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